Associated Press/Photo by Rich Schultz

Politics of desperation

Politics | Conservative governors take office pledging to cut both taxes and record deficits

Issue: "The Haiti quake," Feb. 13, 2010

TRENTON, N.J.-In 1993-just after new President Bill Clinton raised taxes and a year before Republicans swept Congress-New Jersey elected Republican Gov. Christine Todd Whitman on a wave of anti-tax sentiment. She immediately cut taxes by $122 million. Later that year, Republicans in South Carolina and Oklahoma won governorships with tax-cut promises. In Maryland, Republican Ellen Sauerbrey ran on a conservative fiscal agenda and lost by just 6,187 votes even though her Democratic opponent had a two-to-one edge in voter registration. Republicans took Congress and wrote tax cuts into their "Contract with America." Moderate Republican George Pataki (now a candidate for the U.S. Senate) won the New York governor's race after adjusting his message to one of lower taxes and shrinking spending.

Steve Malanga, a senior fellow at the Manhattan Institute, points to this as a historical precedent for the national influence that New Jersey's new Republican governor, Chris Christie, might have if he follows through on his promises to curb spending and slash taxes: He could influence 2010 campaign messaging and give fiscal conservatives credibility.

However, said Malanga, "If he stumbles, if it turns out he announces, 'All this budget mess is worse than I thought and I can't do the things that I wanted to do,' or if the economy really crumbles beneath him and it gets even worse, then it's really possible that the opposite could happen, too."

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The "budget mess" is bad. New Jersey faces the largest budget deficit per capita in the nation: an estimated $1.9 billion, Christie announced on his first full day in office. Although New Jersey is constitutionally required to balance its budget each year, for the last eight years it has been borrowing for its operating expenses, even with a $1.1 billion tax increase by previous Governor Jon Corzine. If New Jersey's government programs grow only at the rate of inflation, the deficit will continue to balloon-so Christie has to hack at state pensions and renegotiate state contracts.

Other states have to slash, too. Of the 37 states with 2010 gubernatorial elections, 14 have budget deficits of 20 percent to 49 percent. California, Illinois, New Jersey, New York, and Florida share a combined deficit of over $46 billion, and all but New Jersey face 2010 races for governor. Anyone who wants the job of governor in these states faces bruising budget cuts, tax hikes, or possible insolvency.

In his inaugural address, Christie warned that New Jersey would have to cut programs, restrain state government, and curb municipal spending to become once again "a home for growth."

On his first day in office, he issued executive orders that established a commission to review red tape, ordered the state treasury to issue quarterly spending reports (including borrowing), banned state agencies from issuing unfunded mandates, and prohibited expanding or establishing programs without measurable outcome-based objectives.

Virginia Gov. Bob McDonnell-the other new Republican governor elected in 2009- took office days before Christie and started by slashing his own salary and that of his Cabinet and staff. His first message to the legislature was a mixed one. He asked the legislatures to double the amount of funding for the Governor's Opportunity Fund and requested a $3.6 million increase for the Virginia Tourism Corporation and a $2 million increase for the Motion Picture Opportunity Fund. Yet he also told the legislature its proposed budget requires a $4 billion reduction, and he reiterated his promise to veto a budget with tax increases.

At least these governors have voter desperation behind them. A Quinnipiac University poll found that 97 percent of New Jersey residents say the state has a serious budget problem. Spending cuts emerged as the top voter priority, even if it means layoffs or furloughs for state workers, which 50 percent of union households support. In his inaugural address, Christie said voters are urging him, "Do what you said you would do." Other states and future governors are watching, too. If he succeeds, Malanga said, they'll reason, "Look, this guy did it here. There's no reason we can't do it in this state."


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